Key events ahead - Nomura

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 3, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Guatemala) - Analysts at Nomura offered the headline events (all times are GMT) for the week ahead.

    Key Quotes:

    " 1. US: ISM Manufacturing (Monday 15:00), Trade balance (Wednesday 13:30), FOMC Minutes (Wednesday 19:00), Nonfarm Payrolls (Friday 13:30) 2. UK: Trade Balance (Friday 09:30) 3. CH: Caixin PMI Manufacturing (Monday 01:45), CPI YoY (Saturday 01:30), PPI YoY (Saturday, 01:30), Foreign Reserves (Wednesday).

    In the U.S., we start the new year with ISM manufacturing on Monday, and we forecast the index to remain low (at 49.0) for December as we expect slow growth in the manufacturing activity to continue to linger. October’s trade report reflected considerable slowing in the demand for US manufacturing goods abroad. We expect the deficit to widen to -$44.9bn in November on the back of continued declines in exports. FOMC minutes are out on Wednesday for its December meeting. We expect the minutes to give us better insight into the FOMC’s plan for future hikes, and we are also focused on identifying further discussions about the “neutral” interest rate.

    The November jobs report was solid, with total nonfarm payrolls growth exceeding 200k, and the unemployment rate remaining low at 5.0%. We expect a steady pace of job gains again in December, and we forecast total NFP will gain 220k jobs. We expect the unemployment rate to remain unchanged and average hourly earnings to grow by a solid 0.28% m-o-m (2.8% y-o-y) as the labor market continues to tighten. On the central bank front, a number of Fed speeches will be held next week, including Williams, Mester and Lacker with topics covering the Equilibrium Real Interest Rate, Macroprudential Policy Implementation and general Economic Outlooks.

    The BoC’s Poloz is also expected to address the Chamber of Commerce in Ottawa on Thursday.

    We also have the Riksbank publishing the minutes of its previous meeting on Friday, which should provide more insight into the extent of the Bank’s dovish bias (see Riksbank Review: Keeping a dovish stance, 15 December 2015).

    Euro area wide and individual country December inflation, PMI and industrial production statistics will dominate the European calendar next week. We forecast euro area flash December HICP on Tuesday to increase to 0.4% y-o-y from the revised 0.2% y-o-y in November. Continuing oil price declines will somewhat mitigate the positive energy base effects related to declines last year (which alone would add 0.3pp to the HICP inflation rate). We expect core inflation to edge up to 1.0% y-o-y in December. In terms of country dynamics, and expect German preliminary HICP to increase to 0.2% m-o-m, where a large decline in energy prices will likely be offset by stronger food prices and a seasonal risk in package holiday prices.

    We forecast German industrial production to post another modest increase of 0.1% m-o-m in November after a 0.2% m-o-m gain in October. We expect that weak car production might result in a contraction of manufacturing output for the month of November, but energy production should rebound following a sharp decline in October, helping offset weakness in the manufacturing sector.

    In the UK, there was a surprisingly sharp widening of the goods trade deficit in October, where the declines in exports and rising imports look too concentrated to be persistent. We expect this deficit to shrink to £9.8bn, which would similarly shrink the overall deficit (including services) to £2.2bn.

    In China, our FX strategists estimate headline FX reserves rose by USD19.0bn to USD3457bn in December, although after adjusting for FX and coupon effects, we estimate a fall of around USD10bn."
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